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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
AN ECONOMIC assessment study has found that Brisbane-based Australia TradeCoast (ATC) is the fastest growing trade and industry precinct in Australia - and a key driver of economic growth and employment in Queensland.
The ‘Australia TradeCoast Economic Assessment and Forecast Study also revealed that the unprecedented growth of the ATC in recent years was a strong sign of things to come, with significant further growth forecast over the next 20 years in all areas — business activities, employment, infrastructure and trade.
In 2005/6, business activities within ATC contributed $4.1 billion to the state economy — and this contribution is expected to rise to $9.4 billion by 2026.
Employment is expected to increase from 43,000 positions in 2005/6 to 106,000 by 2026, making the ATC region Queensland’s second biggest employer by area (the largest being the Brisbane CBD).
The strength of the region is further emphasised through businesses located in ATC spending $7.5 billion in capital expenditure during 2006/7.
ATC general manager, Wendy McMillan, said the study provided invaluable insight that would ensure future planning catered to the anticipated growth of the region.
“By appreciating the impact of the region and forecasting for the future, it enables Australia TradeCoast, our partners, business associates, all levels of government, investors and potential investors to make informed decisions about future business opportunities, infrastructure and land-use requirements,” she said.
“As we continue to market Australia TradeCoast to current and potential investors both overseas and domestically, it is important we are able to demonstrate long-term business opportunities.
“The Economic Assessment and Forecast Study used a robust and conservative methodology to ensure figures and forecasts were reflected as accurately as possible.”
There is a range of key infrastructure projects either planned, underway or approved for the region that are considered essential to ensure long-term sustainable growth for not only ATC, but also the wider Queensland and south east Queensland economies.
These include Brisbane airport’s new parallel runway project, domestic and international terminal expansions and northern access road project, as well as the construction of berths 11 and 12 at the Port of Brisbane and the Port of Brisbane motorway (stage 2).
The modelling in the study - prepared by PriceWaterhouseCoopers with Monash University - found that these infrastructure projects will add a further $1.8 billion to the Queensland economy in 2010/11.
“These essential infrastructure projects will enable increased trade and tourism throughout the state and will be integral in meeting the forecasted growth of both the Port of Brisbane and Brisbane airport,” said McMillan.
She said the study demonstrated business activities and infrastructure development within ATC would continue to contribute a significant amount to the local and state economies over the next 20 years.
“This growth will benefit not only the 7500 businesses in Australia TradeCoast’s boundaries, but also the thousands of related businesses and industries that rely on the flow-on effects from activities within the region.”
The ATC region is located in Brisbane’s booming northside and anchored by the Port of Brisbane Corporation (PBC) and Brisbane Airport Corporation (BAC).
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
IT’S been claimed some freight forwarders get caught up in selecting a business strategy that depends on which of two business models they use and thereby ignore the opportunity to develop a scalable, customised strategy that is based on both systems.
That’s the view of Melinda Elmowy, executive vice president of global marketing for CargoWise edi, a provider of integrated international supply chain logistics management systems.
“Conventional wisdom in the freight forwarding industry is that there are two strategies for dealing with the twin pressures of shrinking margins and increasing customer demands depending upon the operating model in use,” said Elmowy. “One model is the operator-centric, or cottage industry model, that works on the assumption that every supply chain job is unique, and that providing personalised service is the optimum route to customer satisfaction. The second model is system-centric, a more scalable system that recognises that there are ‘normal’ variations of each job, and the underlying processes at work are fundamentally the same.”
Elmowy argues that the operator-centric model practised by most freight forwarders requires independent units to please clients, thereby creating the need for multi-tasking. The cottage industry approach, she says, characteristic of low-volume, high-margin businesses, places vital job details and client preferences in the hands of one person, and is not always the best solution for personalising customer relations.
“The problem with this business model is that client preferences become the property of a single operator where all job details end up inside the head of one person who handles the account. This creates chaos when that person is unavailable. In addition, the requirement to multi-task means that companies must employ highly skilled,
xperienced and expensive people to oversee each account, despite the fact that much of their time is spent handling low level, repetitive tasks that others could do.”
According to Elmowy, the solution is the abandonment of the single operator centric/cottage industry business model and the implementation of a standardised freight forwarding model that simultaneously employs a division of labour and creates a control system that can be personalised to each account while delivering better operating results by driving down costs.
“This combined method of operation eliminates the single operator system, expensive multi-tasking and creates instant personalised productivity that occurs whenever people have to switch between tasks,” she said. “There is also less need to hire multi-skilled people whom end up completing tasks such as data entry, document chasing, faxing and filing. By creating a division of labour, companies can use lower-cost personnel to complete low-level everyday jobs, while employing fewer high-level people to complete the more complex tasks.”
CargoWise edi operates from 12 worldwide offices across the US, Europe and Asia.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
IATA has blasted as “a failure” the UK Civil Aviation Authority’s decision to allow costs at London airports to rise by a massive 50 per cent between 2008 and 2013.
“Failure is the only word to describe the CAA’s decision,” said Giovanni Bisignani, IATA’s director general and chief executive officer.
For London Heathrow, the CAA has allowed charges per passenger to rise by 23.5 per cent from April 1 this year — followed by increases of 7.5 per cent plus inflation for each of the next four years. In the case of Gatwick, a 21 per cent hike from April 1 will be followed by increases of two per cent plus inflation for each of the next four years.
In 2006, the British Airports Authority (BAA) generated an operating profit of 35 per cent at Heathrow, which produced a net return on capital invested of 15.3 per cent — twice the level of the cost of capital set by the regulator. “Economic regulation must produce results that are measured by improved efficiency and quality, not reward excessive monopoly profits and embarrassingly low service levels,” said Bisignani.
“The regulator already allowed a 50 per cent increase between 2003 and 2008 and now the road is being paved with gold for a further 50 per cent increase. Only an out-of-control monopoly could think in such terms. And only a phantom regulator that is the result of a flawed structure could allow this to happen. Compare that to the 64 per cent improvement in labour productivity and 16 per cent reduction in non-fuel unit costs achieved by airlines since 2001.
“The bureaucrats have proved to be impotent in defending the interests of travellers against monopolies. This decision impacts London’s competitiveness as a world city. If we don’t fix London’s dysfunctional airports, the city’s regular travellers will find a more convenient home. Frankfurt, for example, would be only too happy to welcome them,” said Bisignani, adding that the UK authorities must act decisively and speedily to get the basics right in order to protect London’s competitiveness.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE AUSTRALIAN Customs Service (Customs) and industry have engaged in a working group to examine the feasibility of an “Alternate Cargo Reporting” regime. Conceptually, this is based on the supply of cargo report data to Customs “pre-load” in a similar manner to the “24 hour” rule adopted by United States Customs and Border Protection (USCBP). The aim is to place the onus on overseas entities to comply with statutory cargo reporting requirements and importantly to provide an environment that facilitates early and predictable import cargo status advice. The working group came to an impasse last year as there was difficulty achieving consensus on reporting roles and responsibilities by industry stakeholders. Accordingly the project was placed on hold.
The Customs Brokers and Forwarders Council of Australia Inc (CBFCA) has now made a request to Customs to review existing Integrated Cargo System (ICS) functionality to address improvements in cargo reporting functionality and to reduce incidents of late targeting. As outlined in Australian Customs Cargo Advice 2007/05, the CBFCA understands that Customs is increasingly using the Import Declaration for its border risk assessment (and not just for commercial / revenue collection purposes). The problem is that the current systems and business processes do not adequately match this requirement.
As a result, CBFCA and Customs representatives met in Canberra on Monday 25 February to discuss a range of issues pertaining to targeting, risk assessment and examination of import sea freight — this was followed up with another meeting between the parties in Sydney on Monday 3 March 2008.
A summary of the main issues discussed at these meetings are outlined below :
Cargo Reporting Compliance
Customs has indicated that cargo reporting compliance activities may increase in line with the “CEOs Customs Compliance Statement 2007-2008”.
The CBFCA outlined the many causes for late cargo reporting, including :
1. the difficulty to access voyage number data used by the principal shipping line in reporting to the ICS. Visibility of voyage number data through the IAR reference file needs more work to be done to make it more accessible and to be more user friendly (perhaps in an Excel format) as well as integrated into third party software applications. The CBFCA also sees it as being appropriate for Customs to work with Shipping Australia to develop ways and means to ensure the IAR data (or at least voyage number data) is provided at an earlier time to facilitate early reporting of forwarder cargo reports.
2. Forwarders lodge voyage number data in line with "what they have", if it is incorrect, they need to withdraw and re-report the cargo report. Similarly, forwarders often have to make other adjustments to cargo reports in order to overcome ICS inadequacies due to the incorrect posting of cargo report data by a higher level forwarder or shipping line. Customs has limited ability to differentiate between a "late report" and a "re-report",
3. "Reasonableness" of using the original Impending Arrival Report (IAR) Estimated Time of Arrival (ETA) as the basis for calculating timeliness of reporting compliance. An "actual" ETA, or amended IAR date may be more appropriate,
4. The difficulty to access trans-shipment vessel data — whilst there are some commercial Information Communication & Technology solutions in the market, the data feeds from some shipping lines lack accuracy and are not always provided in a timely manner.
5. Late or incomplete documents from Overseas Agents and Local Customers, and
6. Errors or laziness on behalf of the forwarder - we explained that while this "may" occur, this is the only cause by which escalation and application of the Infringement Notice Scheme (INS) and penalties would have a possible direct impact in improving.
The CBFCA suggested that if increased cargo reporting compliance can be achieved, then an opportunity exists for the import declaration to be lodged early and matched to the cargo report. As explained by the CBFCA, another impediment to lodging early import declarations is the difficulty in ascertaining the Value of Taxable Income (VoTI) as obtaining relevant data from shipping lines is not always achievable in a timely manner.
Note : VoTi compliance management, policy and materiality issues have been separately raised by the CBFCA with the Customs executive and the Australian Taxation Office. The CBFCA anticipates that it will be in a position to announce information pertaining to these developments in the near future.
The CBFCA stressed that assuming that an environment with minimal Customs / systems impediments were to exist, then the next issues would need resolution :
1. How long a screening period does Customs really need once this full provision of data is provided (remove the 24hr/2hr screening period impediments and use them as "maximum screening periods" - if it takes 1 minute to screen, release it in 1 minute, if it takes 3 hours, release it in 3 hours etc) and
2. How would amendments to the cargo report or import declarations be treated? (particularly “non-critical” data fields).
Certain Status
The CBFCA explained how the predictability and timeliness of cargo release is essential in order to deal with increasing import container volumes, terminal congestion, Vehicle Booking Slots (VBS) etc.
The CBFCA stated that depending on the answers to these questions above , it is quite possible that the CBFCA would support a model whereby an Integrated Cargo System (ICS) release is only transmitted after an agreed screening period (which would commence after the receipt of the cargo report AND import declaration). Importantly, this would overcome the situation of Customs issuing a release ($YYY) and then late targeting a consignment with CEF intervention.
Delays at Container Examination Facilities (CEFs)
The CBFCA highlighted the difficulties experienced by delays in CEF processing in obtaining VBS and co-ordinating downstream logistics issues. A particular focus was placed on delays experienced at the Sydney CEF during December 2007 and at other Australian ports (the latter primarily resulting from congestion of end of week vessel arrivals and freight availability).
The CBFCA highlighted its proposals as referenced to the New South Wales Government’s Independent Pricing and Regulatory Tribunal (IPART) :
1. To have stevedores supply three (3) days of availability from the time that the container is cleared by Customs and physically available at the terminal and
2. For Customs to work extended hours and / or night shifts to minimise disruption of operations during “peak periods” of the day.
Compensation
Customs stated that it will review the formal “Complaints & Compliments” process to provide an improved mechanism to measure CEF performance. The CBFCA also requested that a formal process be introduced to facilitate the supply of data to assist in identifying the cause(s) of delay and claiming of the recovery of costs from Customs and / or stevedores.
Information dissemination
Customs has agreed to the CBFCA request to provide detailed presentations in relation to these referenced issues at the upcoming CBFCA State Conventions – refer to www.cbfca.com.au
For any further enquiries, please contact Paul Zalai (CBFCA manager freight and business operations) at This email address is being protected from spambots. You need JavaScript enabled to view it.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE Customs Brokers and Forwarders Council of Australia (CBFCA) has called for further feedback on the Export Declaration Number (EDN) issue.
Manager freight and business operations, Paul Zalai, said in response to advice from Customs that follow up action would be taken on export processes pertaining to “idle EDNs” — the CBFCA had sought feedback from members in relation to the issue to identify the “root cause(s) of the problem”.
“A common response from CBFCA members was that they create an EDN for an export consignment, which is subsequently being carried by an express carrier. However, the express carrier does not necessarily use this original EDN and instead creates its own,” said Zalai.
The result, he said, was that the original EDN would register as an ‘IDLE’ with Customs as it was never manifested at a consolidation level. The issue was brought up by the CBFCA with Australian representatives at the Conference of Asia Pacific Express Carriers (CAPEC). “CAPEC explained that this practice takes place due to the EDN not being made available at the time of reporting by the express carrier. In essence, CAPEC claims its members do not know that an EDN has been created,” he said.
The CBFCA has advised its members that CAPEC members - such as DHL, FedEx, UPS and TNT – have acknowledged that if an EDN is indicated on the air waybill (in the description field) and/or the commercial invoice, it will alert operational staff that an EDN already exists.
“Some CBFCA members and exporters currently use this approach and it seems to work OK,” added Zalai.
Further feedback on the issue should be referred by email to This email address is being protected from spambots. You need JavaScript enabled to view it.
